The workplace has changed. Diversity is the new normal. Demographics, migration, and economic changes have altered the social context of work. Leading organisations are intentionally increasing workforce and stakeholder diversity to drive innovation and growth in new markets.

Today’s workers, across a broad range of accountability levels, job roles, organisation size, and industry, in home markets and across borders, interact daily with individuals from backgrounds vastly different than their own. That reality requires a new workplace competency—the ability to manage cultural diversity.

Cultural Diversity

Reflecting its civil rights roots, workplace diversity has traditionally been defined and managed in terms of legally protected categories in the United States including race, gender, and disability. These ‘visible’ diversity markers trigger stereotyping and other biases.

Cultural diversity shifts the focus from visual differences to variations in behaviours and mental processes shared by a group of people connected through common life experiences. Cultural diversity intersects with other diversity categories when a group can be distinguished in terms of its shared mental framework for interpreting and responding to the world.

Cultural diversity is not limited to nationality. Within each national culture, there are ethnic, religious, generational, gender, occupational, sexual orientation, social class, and health status subcultures. Those subcultures create huge variations in patterns of thought and behaviour within national groups.

Cultural Intelligence

Cultural Intelligence is an individual’s capability to function and manage effectively in culturally diverse settings—the collection of knowledge, skills, and abilities that enable an individual to detect, assimilate, reason, and act on cultural cues appropriately. Individuals with high Cultural Intelligence display four main competencies:

• CQ Drive is the willingness to work with others from diverse backgrounds. It includes an ability to overcome explicit or unconscious bias and the capacity to persist in challenging intercultural settings—even when the individual feels confused, frustrated, or burnt out.

• CQ Knowledge is an understanding of culture and cultural differences. That involves more than awareness of variations in language, customs, and appearance. Core cultural differences like values, assumptions, and beliefs are often invisible but cause the most problems—and are frequently overlooked.

• CQ Strategy is the ability to flex mentally. With high CQ Strategy, individuals are not confined to a single worldview. They are open to new or integrative ideas.

• CQ Action is the ability to flex verbal and non-verbal behaviour. CQ Action decreases the risk of miscommunication and helps an individual respond to diverse others in a manner that conveys respect and builds trust and rapport.

The four competencies that form high Cultural Intelligence are not abstract ideas. Social scientists have demonstrated that those competencies map to particular regions of the brain. Studies show they predict important measures of performance in diverse cultural settings, including improved problem solving and decision-making, enhanced well-being, increased interpersonal rapport and trust, and better task performance.

The Personality Correlates of Cultural Intelligence

Anyone can develop Cultural Intelligence with training and experience. Some individuals, however, have an enhanced capacity for working in culturally diverse settings.

Openness to Experience

Cultural Intelligence is related to openness to experience. Openness to experience is the tendency to be broad-minded, curious, imaginative, creative, and adventurous. Individuals who are open to new experiences are inquisitive and receptive to cultural variations. They are eager to learn about cultural differences and are willing to try new behaviours and consider alternative perspectives.

Extroversion

Extroversion has also been linked to Cultural Intelligence. Extroversion is the degree to which individuals are enthusiastic about what is going on outside themselves. Extroverts seek out and enjoy social interactions, including exchanges with individuals from backgrounds different from their own.

Cultural learning is largely tacit. Tacit knowledge is information that resides within a person’s mind. Tacit knowledge includes know-how, judgement, insights, beliefs, and perspectives as well as memories, attitudes, and emotions. Tacit knowledge is not easily articulated or documented for transfer to others in verbal or written form. Instead, tacit cultural knowledge develops socially.

Cultural Intelligence develops when individuals engage in authentic intercultural exchanges. Exchanges with diverse others offer opportunities for practising and refining the four competencies of Cultural Intelligence. Although at first faced with the disorientating effects of culture shock, the individual gradually develops:

• increased confidence, a greater tolerance of uncertainty, and respect for diverse others (CQ Drive).

• an understanding of their own value set and an awareness of cultural similarities and differences (CQ Knowledge).

• an ability to hold multiple perspectives, make culturally appropriate attributions, and engage in more frequent checking and adjustment of cultural assumptions (CQ Strategy).

• a new repertoire of flexible, culturally appropriate responses (CQ Action).

These competencies transfer across different cultural settings.

Extroversion is associated with a learning goal orientation. A learning goal orientation involves a desire to learn new competencies, whereas a performance goal orientation is associated with a desire to avoid or hide failures. Individuals with a learning goal orientation develop higher levels of Cultural Intelligence from their intercultural experiences than individuals with a performance avoidance orientation because they persist with their cultural learning, even in the face of inevitable intercultural challenges, embarrassments, and failures.

In addition, extroverts are more likely to develop a broad support network in new cultural settings, which helps to buffer the stress of culture shock.  Culture shock refers to the disorientation and distress that a person experiences when they are exposed to a new cultural environment. A broad social network in novel cultural settings provides instrumental (practical) and emotional support, and improves adjustment and well-being.

Low Need for Control

Individuals with a lower need for control also find it easier to develop Cultural Intelligence. Those who do not seek to control their environments may profit more from their international and multicultural experiences because they have fewer preconceived ideas, are more tolerant of ambiguity, and are more willing to experiment with new approaches and to consider alternative worldviews.

Emotional Stability

Neuroticism is linked to lower Cultural Intelligence. Neurotic individuals find it difficult to cope with and manage stressful situations. They are more likely to experience anxiety, depression, insecurity, and nervousness in novel cultural settings. In turn, their anxiety negatively affects their motivation for intercultural interactions and their ability to adjust and respond effectively to individuals from diverse backgrounds. Studies show that neuroticism is positively associated with ethnocentrism—belief in the superiority of one’s own culture—and negatively associated with cultural flexibility and tolerance for ambiguity.

The opposite of neuroticism is emotional stability. Emotionally stable individuals are more comfortable with novel situations and more confident in taking risks and stepping outside their comfort zones.

Building a Culturally Intelligent Workforce

The personality correlates of Cultural Intelligence are useful when recruiting or promoting employees for global roles, or selecting individuals for international and multicultural assignments. Individuals who are open to new experiences, extroverted, emotionally stable, and who have a lower need for control are likely to have higher levels of Cultural Intelligence and enhanced effectiveness in diverse cultural settings.

Individuals with those personality traits are also likely to develop Cultural Intelligence at faster rates and achieve higher levels of Cultural Intelligence from their international and multicultural experiences.

Cultural Intelligence predicts expatriate adjustment and performance, cross-border leadership effectiveness, individual performance in multicultural settings, performance of multicultural teams, higher joint profits in intercultural negotiations, the development of diverse networks, and the sharing of information and ideas between culturally diverse individuals. However, the criteria that are typically perceived as critical for international success include technical expertise, knowledge of internal company systems and practices, and domestic experience and management performance.

When an individual with a low natural propensity for Cultural Intelligence is selected for a global assignment on the basis of strong technical or domestic leadership skills, formal training in Cultural Intelligence is recommended. Cultural Intelligence training transfers the foundation of knowledge, skills, and abilities required to manage cultural diversity, and improves performance in diverse cultural settings. Without the right foundation, employees who are thrust into a culturally diverse environment with a ‘sink or swim’ approach are likely to suffer the negative consequences of culture shock for job performance, attitudes, and physical and mental health.

In addition, Cultural Intelligence training equips individuals with the skills they need to self-learn from their intercultural experiences. This avoids overwhelming them with long lists of dos and don’ts and reduces the likelihood of disorientation when encountering novel scenarios.

The Competitive Advantage of Cultural Intelligence

Cultural Intelligence helps organisations better manage diversity in their markets and workforces. Companies with leaders and workers who have high Cultural Intelligence are more agile. These organisations can quickly adapt processes, products and services to capture new opportunities and respond to change across diverse markets.

Cultural Intelligence also promotes successful intercultural relations, both inside and outside the organisation. This improves business performance via enhanced innovation, increased workforce engagement, and more effective partnering.

Diversity management and Cultural Intelligence are powerful allies. To unlock the value in diversity, organisations must possess the competencies needed to foster a context that discourages social categorisation processes and promotes inclusion, open dialogue, and shared learning. Backed by over a decade of scientific research and practical application, Cultural Intelligence provides organisations with a framework for managing diversity that yields tangible results.

As a tool for managing any form of cultural diversity, Cultural Intelligence helps turn a business risk into a strategic strength. Organisations with well-managed diversity programs and workforces with high Cultural Intelligence are best placed to thrive amid global complexity and change.

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